Laguna Hills’ Sonendo Inc. is on a mission to make root canals less painful, more successful, and much faster.
The 16-year-old company, one of several prominent dental device makers based in Orange County, says it has revolutionized the root canal procedure with the launch of its GentleWave System, a product which is designed to flush out the entire canal of the tooth, down to its microscopic spaces, with fluids.
Sonendo (NYSE: SONX), which raised over $84 million in an initial public offering last October, aims to make the company’s core products even better.
According to the firm’s Chief Executive Bjarne Bergheim, its newest device, the CleanFlow, “takes the procedure to the next level” for an even less invasive approach.
“Every time you hear ‘root canal,’ you cringe a little bit because of the pain associated with it,” Bergheim told the Business Journal during a recent tour of the company’s headquarters.
“Now, we’re changing that up.”
Sonendo employs 250 total employees, 140 of whom work at its 55,000-square-foot Laguna Hills base, which includes its manufacturing facility.
It develops devices, single-use accessories and a software platform for the dentistry branch concerned with root canal therapy, known as endodontics.
Root Cause
A clinical study conducted by the company states that 99% of patients who received a root canal with the GentleWave and the CleanFlow products experienced no discomfort during the procedure.
Not only do 30% to 70% of patients experience pain and discomfort following a traditional root canal procedure, but they risk a failure rate of up to 32% because it leaves half of a tooth’s rotten internal tissue inside, according to Bergheim.
“If you don’t clean these things out, you’re going to have a reinfection,” he said.
This often results in secondary procedures.
“People don’t want to come in multiple times to the dentist. You want to come in, get your root canal done and get out of there. Plain and simple.”
Sonendo’s GentleWave system cleans and disinfects the entire root canal, reducing the failure rate to under 3%, Bergheim said. It also shortens the length of the procedure from about 90 minutes to 60 minutes, and in some practices, 30 minutes.
“It’s obvious,” he said. “Patients want less pain, and they want better outcomes.”
800K Procedures
Since commercializing in 2017, about 800 offices throughout the U.S. and Canada have adopted Sonendo’s GentleWave System.
As of March, the device has been used in 800,000 root canals, accounting for less than 2% of all procedures performed.
Sonendo previously topped the Business Journal’s list of fastest-growing mid-sized private companies, with two-year revenue growth of over 800% between mid-2017 and 2019, before experiencing what the CEO called a “pause” during the pandemic, sales-wise.
The company was far from being the only area dental-related firm in OC to take a hit in sales during the pandemic (see story, page 20).
Fourth-quarter revenue for 2021 rebounded 14% to $9.9 million for Sonendo, while full-year revenue grew 42% year-over-year to $33.2 million, according to the company’s regulatory filings.
IPO: Mixed Results
The company no longer qualifies for the fast-growing private companies list; last October Sonendo raised $93.6 million in an IPO after pricing 7.8 million shares at $12 per share. It initially expected shares to be offered in the $15 to $17 range.
Like a majority of 2021 IPOs, the company’s shares are down since the public listing, and now trade around $3.
Sonendo sported a $80 million valuation as of last week.
Bjarne Bergheim’s father and company founder, Olav Bergheim, counts a 10.5% stake in the business and is the largest individual shareholder in the Sonendo (see story, this page), while the company’s largest institutional investor is private equity firm General Atlantic with a 12.4% stake, according to the company’s latest proxy statement.
Future Objectives
On April 20, Sonendo announced the launch of the CleanFlow, a device designed to work with Sonendo’s GentleWave System to facilitate an “even easier, simpler and more efficient” procedure.
With the CleanFlow, nothing goes inside of the tooth anymore. Instead, the device creates millions of soundwaves that dissolve rotten tissue, Bergheim said.
The company created a “very strong IP portfolio” for the novel technology with Irvine-based law firm Knobbe Martens, he said.
While Sonendo is currently focused on root canals, the company’s R&D; team will continue to update and expand the CleanFlow’s uses until it could potentially enter other areas of tooth decay, like cavities, Bergheim said, adding that 175 million cavities are treated in the U.S. every year.
Consumables
The largest part of Sonendo’s business is neither sales of the GentleWave system—which costs around $90,000—nor CleanFlow to dental practices.
Rather, the single-use instrument that adheres to the top of the tooth during a GentleWave procedure, called a consumable, is. Those products make up over 50% of Sonendo’s total revenue.
“There have been a lot of dental companies that have sold boxes, but no consumables,” Bergheim said. “That’s not sustainable.”
Bergheim expects its consumables category to continue to both new and existing customers.
Over time, the company also expects to permeate more international markets.
“We’re a growth story, so this is about going after a very large market opportunity,” Bergheim said.
“Our goal is to continue to grow this company quickly, change root canal therapy in a big way, and ultimately, change dentistry in a big way.”
Generations of Innovation
Olav Bergheim, 71, founder of the $3 billion-valued ophthalmic device company Glaukos Corp. (NYSE: GKOS) in San Clemente, among many other healthcare ventures, founded Sonendo Inc. in 2006.
He still serves on Sonendo’s board, and is the company’s largest individual shareholder.
Bjarne Berghaim estimates his father has started some 15 companies in Orange County through his Laguna Hills life science accelerator, Fjord Ventures.
Each presented a “transformational opportunity” to change a field in medtech or lifesciences—Sonendo included, Bjarne Bergheim said. Approximately 17 million root canals take place in the U.S. and Canada every year, representing a $1.9 billion market opportunity.
“Tooth decay is one of the biggest opportunities in medtech,” he said. “For us, it’s about growing that business and continuing to take market share.”
Other firms in the Fjord lineup—which, like Sonendo, often count music-related names—include cardiac-focused Adagio Medical Inc., hematology-focused Otello Medical Inc., and Metronom Health Inc., which is focused on treating diabetes.
